There are so many home loan choices available; it may be hard to identify the bond that is right for you. All banks provide a home loan for anywhere from 10 to 30 years, repayable monthly at an interest rate margin lower than prime rate. All of them look so attractive – how do you make a choice?

Everyone has different needs and circumstances and everyone requires unique solutions. You need to choose a bond that best suits your needs and situation and that best meets your requirements.

Each application will be looked at on merit. Your credit history and banking record plays a big role when applying for a homeloan. Debit orders are the preferred way of repayment, but you can negotiate with your bank if this is not the most convenient way for you to pay.

Life insurance is compulsory on the smaller bonds under R200 000 and you do not need to purchase life insurance from the bank, you simply have to prove that you are covered.

As a first time homebuyer, you will qualify for a 100 percent bond. You can adjust your repayment per month at any bank to pay off your homeloan faster.

Different banks – different options

ABSA offers Multiplan, which allows the freedom to structure your homeloan account into separate accounts with their own terms and conditions. All accounts will be managed through a single account.

First National Bank rewards their clients with eBucks on all homeloan products. This is an attractive option for homebuyers, as they will receive some return on their investment – sooner than usual.

Standard Bank offers Business Mortgage for financing residential properties, which have been converted for business use.

Nedbank offers an investment product called Buy to Let. This product adds rent to your income so you can borrow more and invest in more property.

There are so many banks and each bank has its own set of products for homebuyers. It is important to know the different products (and hidden small print!) so it is best to go to a bond originator who is familiar with different banks and their products. The originator can guide you and help you make the choice that is best for you and your circumstances.

Please contact us if you require any further information or would like to apply for finance:

Complete this short form online

011.327.4489 / 0861 1111 93

morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za

6 Easy steps to home buying

Buying a home can be a time consuming and complex process. Planning helps you to focus on the positive. Here are a few things that you can do to make the process go more smoothly.

Get pre-qualified before you buy

Getting pre-qualified with your lender is simply getting an idea of the price range you can afford. It is based on your stated net monthly income. Note that with a pre-qualification, your information is not verified and the loan you are pre-qualified for is not guaranteed. Get pre-qualified Now!

Do your homework on the area

You might find a home in a neighborhood that you’re not familiar with, which is fine. It just means that you’ll have to do a bit more homework. If you find a property that you like, try and find properties that sold in the last year. How does your home rank? Is it at the top of the price range? If so, it might be hard to resell. Is it average, or on the low end? If so, great – as the other home prices go up in value, they will pull your home’s value up as well. Find out about the schools. A good school district means your neighborhood will always be valued by families which is a great reassurance to purchase, not to mention the fact that you’ll be well placed if you have school-age children.

Protect yourself

Ask for a copy of the documents you will be asked to sign if you decide to buy the property. Read them ahead of time so that you understand the questions that you will be asked, the things you need to know, and the decisions you will need to make. If buying Sectional Title, ask to be provide with up to date Body Corporate Financial Statements. Check to see that the levies are not in arrears.

Keep your expectations realistic

You’re about to spend a big amount. And no house is perfect. Understanding and remembering these two statements will help diffuse the negotiation and the closing stage.

Emotions can sometimes run high for both buyers and sellers. The seller may have loving memories and years of sweat equity in the house. Understanding their motivations for selling will help you to empathise with their situation.

No house is perfect. Always get an inspection. It might cost a few hundred rand, but it’s worth it. It’s the inspector’s job to find any problems with the house that could cost you thousands to repair, down the line. Some inspectors have a tendency to overplay the importance of their role and the items that they find. Get objective opinions that you trust before making a decision on an inspection report. Likewise, if an inspector says a foundation is cracked but it’s nothing to worry about, get a second opinion. Ask a handyman for an idea of how much repairs will cost and how complex they are.

Things to consider

How long do you plan to live in it?

If you buy a home and get a work transfer or decide to move after only a short time, you may end up paying money in order to sell it. The value of your home might not have appreciated enough to cover your initial costs to buy the home and what it would cost you to sell your home.

The time that it takes to cover those costs depends on various economic factors. You should plan to stay in your home at least 3-4 years to cover buying and selling costs.

Will this home suit your needs well into the future?

What do you need in a home to make it work for your lifestyle right now? Five years from now? Depending on how long you plan to live in your home, you’ll need to be sure that it suits your present needs. For example, a two-bedroom home might be perfect for a young couple with no children. But if they were to start a family, the space could very soon become inadequate.

Having an idea of what your life plan is and what your real needs are, will help you to find a home that works for you well into the future.

How does your financial situation and your credit situation look?

And what can you really, honestly, afford?

Is now the right time to be buying? While it’s usually possible to find a bank who will grant you a bond, solid lenders are more skeptical if your credit history is not so good. Generally, only a couple of blemishes on a credit report will make you a good credit risk and could qualify you for the lowest interest rates. It might be wise to avoid borrowing as much as you qualify for because it is wiser not to stretch your financial boundaries. This is a decision only you can make. Are you in a position where you expect to increase your income soon? Would you rather be conservative and fairly certain that you can make your bond payment without being stretched financially? Be sure that whatever you do, it’s within your comfort zone. To determine how much home you can afford, use our affordability calculator.

Where will the money for the deposit and bond and transfer costs come from ?

Usually, home buyers need money for a deposit and bond and transfer costs. However, with today’s broad range of loan options, having a lot of money saved for a deposit is not always necessary – if you can prove that you are a good financial risk to a lender. If your credit isn’t perfect but you have managed to save 10-20% for a deposit, you will still appear to be a very good financial risk to a lender.

The ongoing costs of home ownership

Maintenance, improvements, taxes and insurance are all costs that are added to a monthly house payment. If you buy a flat or a townhouse or live in a security estate, for instance, you have to pay monthly fees. If these additional costs are a concern, you can make choices to lower or avoid these fees. Make your estate agent and your bank aware of the fact that you’d like to limit these costs.

Please contact us if you require any further information or would like to apply for finance:

Complete this short form online

011.327.4489 / 0861 1111 93

morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za